Venture Capitalists’ Investment and Reinvestment Decisions

Prior research (Wells, 1974; MacMillan, 1985, 1987; Shepherd, 1999) has focused on examining Venture Capitalists VCs’ decision making at the pre-investment stage. Few studies have investigated VCs’ financing decisions at the post-investment stage, and the differences between investment and reinvestment. Some scholars claimed that VCs are more likely to provide a venture with initial funding than subsequent financing (Dean & Guglierano, 1990). Others argued the opposite (Ryan, 1994; Guler, 2003). My dissertation seeks to answer this question empirically. I surveyed 40 VCs either in person or over the phone, and asked them to assess how some new incremental information will affect the likelihood that they will invest in a venture at the pre-investment vs. post-investment stage….

Author: Khanin, Dmitry

Source: University of Maryland

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